Tag Archives: auditor

Great Relationships Start with Communication

Most nonprofits and associations of a certain size undergo an annual audit of their financial statements. While not necessarily a pleasant experience, it is an important discipline to maintain fiscal health and accountability. Having performed audits for 34 years here are some thoughts on what makes for a mutually beneficial relationship between auditors and clients.

What should an organization expect from their auditors?

  • A team of knowledgeable and intelligent professionals throughout the organization.
    • Junior staff members should inspire confidence regardless of their experience level.
  • Attentive client service – prompt and responsive communications, a logistical schedule well in-advance of an audits start date, and deadlines should be met ahead of due dates.
  • Technical advice – regular updates on standard changes, regulations etc. that affect your business; and answers to your questions or a referral source when necessary.
  • Pleasant to work with!
  • Fees – reasonable charges for services rendered and regular billing updates to avoid surprises.
  • Presentation skills – auditors should be able to competently present to your Board and/or other advisors such as lawyers, actuaries, and investment managers.
  • Deliverables that exceed your expectations.

What should auditors expect from their clients?

  • Adequate and advanced preparation for the audit and tax return. If a client is still reconciling accounts and making adjustments to the books after the audit commences, it’s almost a guarantee the auditor will incur overruns. Auditors need to be able to do the audit when they have staff in the field for efficiency, not by managers back in their office over weeks as clients process adjustments and make changes.
  • Consistent client engagement during the audit and tax process, and prompt responses to open item requests.
  • Advance notice of transactions and major events before the audit commences such as lease transactions, property sales, loss events, new programs or activities, personnel turnover, and fraud or malfeasance.
  • Prompt payment for agreed upon services.
  • A collegial working relationship.

What do you think makes for a great auditor/client relationship? Tell us.

Facing Your First Benefit Plan Audit? Start Here!

picking-a-benefit-plan-auditorHow to Pick a Benefit Plan Auditor

There are plenty of benefit plan auditors out there – over 7,000 in fact.  However, don’t make the mistake of believing that just any company can effectively audit your plan.  Department of Labor statistics indicate that one in three audits performed are deficient, and the DOL has made hundreds of referrals to the AICPA Ethics division for this poor work.  Unfortunately, the negative exposure from a failed audit reflects on you, the plan sponsor, so it is important to select a firm you can trust.  Here are some suggestions on how to find a qualified auditor:

Read more ...

Audit Preparedness and You (or What Does PBC Mean and How to Make Your Auditor Jump with Joy)

Audit season is starting up for those of you with 12/31 year ends. Nothing really rings in the New Year like rolling forward those net asset schedules, am I right?

I realize it can’t be easy for each side of an audit to understand what it is like from the other perspective unless you’ve been on both sides of the table. To give some insight from the auditor’s perspective that might help you understand where your auditor is coming from, as well as the importance of audit preparedness and your role in it, I thought it might be helpful (and fun!) to go through some common audit misconceptions.

Contrary to belief –

  • Don’t hold back or parcel out prepared items. Auditors LOVE an onslaught of information. I’m not kidding. Walking into a conference room with piles of documents already pulled and waiting is like an auditor’s Christmakkuh. Yes, that’s sad, but it’s true. Just think of the joy you could bring!
  • Your auditors are not asking for items they don’t actually need. Your auditors understand and appreciate that you still have your normal job tasks to do while working on the audit. Wasting your time is not an auditor’s objective, I promise.
  • The week of fieldwork is the time scheduled for the audit to take place. It is NOT the week that you get started preparing for your audit.
  • Providing a requested item on the last day of fieldwork, or weeks (or months) later, does not count as “timely”.
  • The PBC list (Prepared/Provided By Client) is intended to help you get prepared, your auditors will realize (quickly) if you haven’t read it.
  • It may not be immediately apparent that this stack of items you’ve brought over is intended to support that particular balance or fulfill that request. Identifying what is being provided is tremendously helpful. It also reduces the chance of being asked for something you’ve already provided. We know you hate that and we try to not do that.
  • What you have provided may not be exactly what your auditors were looking for. That is no one’s fault but that’s why it’s still on the open items list. There are frequently many differences in terminology and systems from company to company, or it may be about trying to target a specific population or procedure and a different approach may be needed.
  • Your auditors work really hard to make you feel like you are their one and only client … and I hate to be the one to tell you this…but here it goes…that’s not likely the case. Not getting everything to your auditors in the allotted time means them trying to schedule available work time in and around someone else’s audit time.
  • Your auditor is not interested in antagonizing you. No, really. Or if they are, they are giving us all a bad name. What you have become accustomed to may be something your auditor rarely sees. Styles of communication may vary and it may be helpful to try to narrow down an objective. Chances are high that you have insight into what particular report will provide the information that best addresses the request.
  • Some of you ARE actually prepared and timely! It can and does happen! And your auditors know it and appreciate the effort.

The biggest take away message is this: delays in receiving requested items or time incurred in helping get a schedule corrected all add up quickly. Your auditor still needs time to actually perform the work required of them. It is important to understand that getting the schedule is just the beginning of the work your auditor needs to do. Being prepared for an audit is one of the best ways to help ensure that the process is a smooth one, or at least as smooth as it can be.

View Archives

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 12 other subscribers

Latest Webinar Videos